Latin America Ends 'De Minimis' Loophole, Mexico and Chile Impose Taxes Amid Shein, Temu Imports and Steel Industry Concerns

The expiration of the 'de minimis' trade loophole this week marks the end of a policy that waived import duties on low-cost goods, a change that will impact e-commerce dynamics in Latin America. Retailers such as Shein and Temu have thrived under this policy, flooding the region with inexpensive Chinese products. In response, countries including Mexico and Chile have introduced new taxes and increased scrutiny on low-value imports to protect local retailers, although consumers continue to favor lower prices. This influx of cheap Chinese goods has also raised concerns among Latin American steel producers, who face price distortions and reduced demand amid rising imports. Additionally, there is a broader economic implication as some analysts suggest that Latin America’s efforts to diversify and grow its economy are threatened by the volume of Chinese imports, with recommendations to enhance integration with North American neighbors to counter these challenges.